Borrower-In-Custody (BIC) Collateral Law and Legal Definition

According to 31 CFR 203.2 [Title 31 -- Money and Finance: Treasury; Subtitle B -- Regulations Relating to Money and Finance; Chapter II -- Fiscal Service, Department of the Treasury; Subchapter A -- Financial Management Service; Part 203 -- Payment of Federal Taxes and the Treasury Tax and Loan Program; Subpart A -- General Information], Borrower-In-Custody (BIC) collateral means “an arrangement by which a financial institution pledging collateral to secure special direct investments and certain term investments is permitted to retain possession of that collateral, subject to terms and conditions agreed upon between the FRB and the financial institution.”